Technical analysis: key levels for gold and crude

The recent trends in gold and crude are easing somewhat, with gold consolidating and crude retracing. With that in mind, the trend remains in play, while we wait to see how long the retracement lasts for.

Oil rig
Source: Bloomberg

Gold consolidates following sharp rally

​Gold is trading largely sideways this morning following another sharp move higher yesterday. With that in mind, the recent bullish outlook remains in place. While we await a signal that this uptrend is set to continue, the potential for a deeper retracement is worth considering.

As such, an hourly close below $1362 would provide a bearish short-term signal for a deeper retracement. However, should price break through trendline resistance and close an hourly candle above $1366, then the bullish view would come back into play for another move higher for gold. 

Brent rally unlikely to last

Brent is in the process of creating a retracement which is incredibly similar to yesterday’s price action. On that occasion, the failure to create a new low preceded a break through the morning’s high, which then set the price of Brent up towards trendline resistance.

We have certainly seen the first half of that event play out again this morning. Now we need to see if we will push towards the trendline (currently $42.75) before selling off once more.

As such, unless we see an hourly close above $43.22, the downtrend remains intact, with current price action providing clues of a potential retracement into the 61.8% level before selling off to $41.58 once more.

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